This weekly roundup thread is intended for all culture war posts. 'Culture war' is vaguely defined, but it basically means controversial issues that fall along set tribal lines. Arguments over culture war issues generate a lot of heat and little light, and few deeply entrenched people ever change their minds. This thread is for voicing opinions and analyzing the state of the discussion while trying to optimize for light over heat.
Optimistically, we think that engaging with people you disagree with is worth your time, and so is being nice! Pessimistically, there are many dynamics that can lead discussions on Culture War topics to become unproductive. There's a human tendency to divide along tribal lines, praising your ingroup and vilifying your outgroup - and if you think you find it easy to criticize your ingroup, then it may be that your outgroup is not who you think it is. Extremists with opposing positions can feed off each other, highlighting each other's worst points to justify their own angry rhetoric, which becomes in turn a new example of bad behavior for the other side to highlight.
We would like to avoid these negative dynamics. Accordingly, we ask that you do not use this thread for waging the Culture War. Examples of waging the Culture War:
-
Shaming.
-
Attempting to 'build consensus' or enforce ideological conformity.
-
Making sweeping generalizations to vilify a group you dislike.
-
Recruiting for a cause.
-
Posting links that could be summarized as 'Boo outgroup!' Basically, if your content is 'Can you believe what Those People did this week?' then you should either refrain from posting, or do some very patient work to contextualize and/or steel-man the relevant viewpoint.
In general, you should argue to understand, not to win. This thread is not territory to be claimed by one group or another; indeed, the aim is to have many different viewpoints represented here. Thus, we also ask that you follow some guidelines:
-
Speak plainly. Avoid sarcasm and mockery. When disagreeing with someone, state your objections explicitly.
-
Be as precise and charitable as you can. Don't paraphrase unflatteringly.
-
Don't imply that someone said something they did not say, even if you think it follows from what they said.
-
Write like everyone is reading and you want them to be included in the discussion.
On an ad hoc basis, the mods will try to compile a list of the best posts/comments from the previous week, posted in Quality Contribution threads and archived at /r/TheThread. You may nominate a comment for this list by clicking on 'report' at the bottom of the post and typing 'Actually a quality contribution' as the report reason.
Jump in the discussion.
No email address required.
Notes -
The US government is seeking stakes in Intel, TSMC, and Samsung, among other firms:
Similarly, a few months ago, the Trump administration approved Nippon Steel's acquisition of US Steel contingent on the USG receiving a golden share that gives it considerable supervisory authority:
It's an interesting turn for the traditionally market-oriented, small government party to start making a play for the commanding heights of the economy. The Federal government has a long history of giving out subsidies as a matter of policy, but it generally hasn't tried to assert an actual stake in recipient businesses (it will sometimes assume control of failing institutions, but this is generally an emergency measure rather than a long term plan).
I'm surprised and pleased by how philosophically coherent this move is. If the government is going to give out industrial subsidies, why not get something in return? We all know the big corporations will dodge any tax we throw at them, but trying to get around paying dividends risks pissing off their own power base.
That being said, I'm very bearish on the chances of this particular administration doing anything productive and socially useful with additional industrial control. Probably it just goes toward enriching the Trump empire with corruption.
The question is how much return. Do we trust the government to be a great asset manager? Why not just have governments dump money into PE funds if you're trying to IRR-maxx?
Do we think government agencies/employees are better capital allocators than the current cohort of capitalists and Wall St et. al?
The thing is, regardless of whether the government buys specifically stocks, the government will allocate capital anyways. Currently that goes toward treasuries and direct subsidies. The government buying stocks instead is pretty much a direct improvement.
Why is that an improvement? This seems like a terrible way to allocate capital.
Subisides are just a strict loss of monies, and treasuries have abysmal interest rates. The superior growth rate of stocks makes them a means to raise government revenue without raising taxes.
Subsidies don't have to lose money if they have a positive multiplier.
I'm not entirely sure what treasury ownership you're referring to? Social security?
Because in that case, that's the government owning a Treasury issued by the government. The interest paid is real it's paid by the way everything else is, taxes or debt.
I fully agree social security is a shitshow nightmare from numerous perspectives. I think they should move to the "Canadian model" a la CPP, where investments are managed by an extremely competent and largely independent team.
I would like to reiterate that the executive branch borderline randomly scooping up equity stakes in flavor of the month companies is not this. Also, it's likely a transfer of welfare from taxpayers to equity holders AND it will definitely fuck heavily with equity price discovery, leading to a less efficient market overall.
They do if the government can't effectively recoup their investment via tax revenue-- which is what happens when money goes to tax-avoiding corporations.
Yes, that's the problem. Treasuries are essentially just an investment in the government's future ability to raise revenue, but that comes with the obvious moral hazard that when growth fails to cover the interest, "raise revenue" ends up becoming "raise taxes". I do agree with you on the "managed investments" bit-- and also the competent, professional team bit. With reference to...
You won't find me arguing in favor of the implementation. Trump is definitely not the president I trust to do this. But the fact of the matter is, the government helicopters loads of money into flavor-of-the-month causes literally all the time, regardless of party or president. So why not set the standard that the government will get equity in return? And with reference to price discovery-- the government committing money into a sector is a truthful signal that the government is interested in promoting it, and that the government will become self-interested in making favorable regulations toward it. Obviously there are moral hazards associated, but price discovery, of all things, is not going to suffer.
All excellent points!
More options
Context Copy link
More options
Context Copy link
More options
Context Copy link
More options
Context Copy link
More options
Context Copy link
More options
Context Copy link
More options
Context Copy link
More options
Context Copy link
More options
Context Copy link